New Delhi,  Erasing the entire opening session gains and snapping two-day rally, Indian equity benchmark indices closed Wednesday's trade marginally in red.

Inflation rate hitting 40 years high in the UK also dented investors sentiment back home during the afternoon trade. Inflation though is a concern in almost all major economies.

Sensex closed at 54,208.53 points, down 109.94 points or 0.20 per cent, whereas Nifty at 16,240.30 points, down 19.00 or 0.12 per cent.

"UK's soaring retail inflation number along with (the US) Fed Chair's reassurance on bringing down the inflation, disturbed the sentiment, risking sharper rate hikes," Vinod Nair, Head of Research at Geojit Financial Services, said.

With prospects of a sizable interest rate hike by the global central banks, investors are advised to allocate higher weightage to sectors that are least affected by such policies, Nair added.

"The resistance on the higher end is placed at 16,400. On the lower end, support is visible at 16,000," Rupak De, Senior Technical Analyst at LKP Securities, said on Nifty's outlook.